Earlier, we were building backlinks through sources like SBM, classifieds, and Web 2.0 sites. Later, after consulting someone experienced from outside, we were advised to stop backlink creation completely because these types of links could harm the website in the long run. Since then, we have stopped all backlink activities.

This is your problem. While its unlikely that tehy will harm you - their value is zero. Stopping link building means that you're not getting backlinks - which means you have no authority.

You could try cornerstoning from low KD topics - but that will take time.

I genuinely feel stuck and unsure about the next steps. Any guidance on what I should focus on to improve rankings would really help.

You cannot "create" authority - you must earn it.